Correlation Between First Trust and RBC Quant
Can any of the company-specific risk be diversified away by investing in both First Trust and RBC Quant at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Trust and RBC Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Canadian and RBC Quant Dividend, you can compare the effects of market volatilities on First Trust and RBC Quant and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Trust with a short position of RBC Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and RBC Quant.
Diversification Opportunities for First Trust and RBC Quant
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and RBC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Canadian and RBC Quant Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Quant Dividend and First Trust is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Trust Canadian are associated (or correlated) with RBC Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Quant Dividend has no effect on the direction of First Trust i.e., First Trust and RBC Quant go up and down completely randomly.
Pair Corralation between First Trust and RBC Quant
Assuming the 90 days trading horizon First Trust Canadian is expected to generate 1.06 times more return on investment than RBC Quant. However, First Trust is 1.06 times more volatile than RBC Quant Dividend. It trades about 0.13 of its potential returns per unit of risk. RBC Quant Dividend is currently generating about 0.09 per unit of risk. If you would invest 6,926 in First Trust Canadian on September 30, 2025 and sell it today you would earn a total of 288.00 from holding First Trust Canadian or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Canadian vs. RBC Quant Dividend
Performance |
| Timeline |
| First Trust Canadian |
| RBC Quant Dividend |
First Trust and RBC Quant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and RBC Quant
The main advantage of trading using opposite First Trust and RBC Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, RBC Quant can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in RBC Quant will offset losses from the drop in RBC Quant's long position.| First Trust vs. iShares ESG Equity | First Trust vs. iShares MSCI Min | First Trust vs. Invesco RAFI Canadian | First Trust vs. Desjardins RI Developed |
| RBC Quant vs. RBC Quant Dividend | RBC Quant vs. RBC Quant EAFE | RBC Quant vs. iShares China | RBC Quant vs. Purpose Core Dividend |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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